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Gold/Mining/Energy : Direct Focus Inc. (DFXI) -- Ignore unavailable to you. Want to Upgrade?

To: trilobyte who wrote (155)	11/25/1997 10:49:00 PM
From: Clement	Read Replies (1) \| Respond to of 768

Trilobyte, In terms of the new product -- when they choose their product, I suspect that the market may give them a discount p/e anyway because of the uncertainty. They will have to prove I suspect that they can do what they did with bowflex with whatever new product that they have. Bowflex may say that they are a direct marketing company, but the fact remains that they do 80% of the manufacuring of one line of products, and they are only linked to that product. Sort of like diversification, if all your products are in a variety of industries, it's difficult to get 100% from each of the products because your work load/time/expertise is spread out over so many different lines. And if their focus is on larger more expensive products, they have to be experts in their products. Then again, maybe they can remake themselves into a direct marketing company, but I don't think that they have proven that they can yet simply based on the insoles and the bowflex machines so I suspect that the market will reflect that (assuming that it becomes more efficient). Re: bonus criteria, I'm afraid I didn't write down the complete specifics. Rice just mentioned several large figures of quantities of shares that expired because of unmet criteria -- he didn't elaborate and I did not ask. I simply asked because I remember reading way back when that S&S was due for a pretty hefty load of options and warrants (that probably doesn't help. Sorry. Clement PS. Re: BSP -- Interesting that you should ask... last week we bought a bundle at 10.50 I think was the price (I assume you're talking about Beamscope). The main reasoning was that it is growing a lot faster than its p/e, and we believe that there could be a significant consumer driven miniboom come christmas). Our investment club tends to be fairly conservative, our other investments include SWP.B (bought@16), ABO.B, LV.A & LV.B (MSE -- this is a company that we believe is undervalued given the cash in the bank, etc. -- we bought at 4.75), OXG (a real estate play -- long term growth though -- we bought at 24), PIR (NYSE -- long term play for housing starts @ 18.50), DRI (long term play based on good solid management, cash in bank, potential windfalls @ 1.85). We're currently looking at HR.IR (another real estate play). PPS Re: Sceptre Equity and other Mutual funds. I'm a little elitist when it comes to mutual funds [I also tend to generalize too :)] in that I believe that normal people can do better than they can. While the problems with QZR may not initially have been obvious, there were a few warning signs of growing pains. My friend who talked to the analyst at McBurney (I think it was), said that the guy knew only as much as the company told him -- the guy had failed to build in a few factors into his model and failed to consider a few things. My guess is that this may happen a lot -- and that's why it's always good to double check everything, even if it means looking into assumptions of brokerage reports. My friend also suspected that there was either fraud or gross incompetence after they made their earnings revisions downwards -- so sometimes it's just bad luck I guess. (If I'm not mistaken though, they inflated their earnings -- something like that always shows up on cash flow if you're looking for it -- but then it is sometimes quite difficult to spot even then -- did it have to do with something about double counting the equipment that they sent to their franchisees?). Mutual funds can also overdiversify and it is difficult to keep track of all investments especially when you have hundreds of stocks. Some managers have done it like Peter Lynch -- but 80% don't outperform the market (ie you pay them so much for so little when there are so many people who would do much better buying TIPS or the like). <sigh> Actually the main reason why I don't invest in mutual funds anymore, is that it's just too much fun to invest on my own :). Again I'm making assumptions that Sceptre is like the rest of 'em. You'd know best. Incidentally, did I see you on the TVL thread a few months ago?